Kerala’s Left government has moved toward a more investment- and market-friendly development model, sparking debate over whether this shift is strategic reinvention or a neoliberal turn.
Supporters say the change was necessary to overcome economic stagnation, while critics warn it could weaken welfare systems and worsen inequality and environmental stress.
The transformation is partly influenced by lessons from West Bengal’s decline, as Kerala’s Left pursues political relevance through pragmatism despite official denials of any ideological shift.
When economists Amartya Sen and Jagdish Bhagwati were locked in a celebrated public debate over India’s development path, two Indian states inevitably entered the conversation—Gujarat and Kerala. Bhagwati championed Gujarat’s growth-led model, arguing that rapid economic expansion would ultimately reduce poverty. Sen, on the other hand, held up Kerala as evidence that prioritising social development—education, health, and welfare—was a more sustainable route to alleviating deprivation. This was not the first time Kerala’s development trajectory had captured the imagination of scholars of international repute.
The “Kerala Model” entered academic discourse after a UN-sponsored study highlighted the state’s remarkable social indicators despite its relatively modest economic performance. It became a direct challenge to the market economists’ trickle-down thesis, proposing instead that sustained investments in human development would, over time, spur economic growth.
While Kerala did achieve globally recognised milestones in literacy, health, and gender equity, the anticipated economic transformation lagged behind. This gap between social progress and economic stagnation eventually pushed the Kerala Model into crisis. However, some scholars argue that it was precisely the measures adopted in recent decades—many of them driven by Left-led governments—that helped the state navigate this crisis. Ironically, these measures often resembled the very policies the communists had long criticised, leading some to describe this shift as the Left’s reinvention in Kerala. Critics, however, call it a capitulation to neoliberal logic rather than a strategic recalibration.
This raises a larger political question: Is the new market- and investment-friendly template embraced by the Left in Kerala fundamentally different from the earlier models pursued in Kerala and West Bengal? Can a growth-oriented strategy—once derided even by Amartya Sen—secure the survival of India’s lone remaining Left bastion? And did the Left’s failure to “adapt to changing times” ultimately contribute to its decline in West Bengal?
Dr K. Raviraman, economist and member of the Kerala State Planning Board, argues that the Left in Kerala has undergone what can legitimately be called a reinvention, the new Left. “This is the second turnaround in the development trajectories of the state. The first turnaround occurred in the early 1980s, fuelled by remittances. The second turnaround occurred in the 2010s, when social growth, always Kerala’s strength, was combined with unprecedented levels of capital expenditure. If both the Left and non-Left political parties could take credit for the first turnaround, the credit for the second one should rest with the New Left,” he adds.
Raviraman notes that Amartya Sen’s proposition—that strong social development would naturally trigger economic growth—did not play out in Kerala. Despite its impressive human development indicators, the state did not experience the corresponding economic dynamism. “This compelled the Left to make a significant paradigm shift,” he says. “Without it, the Left risked becoming politically and economically irrelevant”
He rejects the argument that this shift amounts to capitulation to neoliberalism. For Raviraman, Kerala’s insistence on expanding and deepening welfare protections distinguishes its model from neoliberal regimes, where shrinking the state’s social responsibilities is the norm. The Left in West Bengal, he adds, failed precisely because it could not undertake such a paradigm shift while in power. In his book, Kerala 1956 to the present, co-authored with Thirthankar Roy, K Raviraman strikes a cautionary note: The state’s future success will depend on balancing economic growth with environmental sustainability, improving the quality of education, improving the employability of graduates, and social equity. It is a complicated task precisely because so much of recent growth has been driven by environmental exploitation. There is a real prospect of worsening inequality along caste, class, gender and age lines if the current pattern of growth slows."
There has been a perceptible shift in the Left’s approach since the late 1990s, but this transition has become far more pronounced since 2016, when the Pinarayi Vijayan government assumed office. Over the past nine and a half years, the government has introduced a range of policy changes that the CPI(M) and the broader Left had long resisted. The push for private universities, along with a suite of measures to ease business operations, signals a decisive departure from earlier ideological positions. In many cases, these shifts run counter to the national leadership’s stated principles, underscoring the Kerala Left's pragmatically tailored developmental model.
Not everyone views this as a reinvention. “It is not the reinvention of the Left; the unbridled urge to pursue neoliberal policies reflects the Left’s lack of imagination in Kerala,” says Dr J. Prabhash, former head of the Department of Political Science at the University of Kerala. He argues that the policies now being adopted stand in apparent contradiction to the Left’s declared objectives. If continued, he warns, they could deepen economic inequality and accelerate environmental degradation in the state.
The changes the Left has introduced in Kerala have been subtle, implemented without creating much political disturbance. In West Bengal, the Left’s push for industrialisation provoked intense backlash from farmers and agricultural communities due to large-scale land acquisition. In contrast, the Kerala Left has been far more cautious on sensitive matters such as land. Its strategic soft-pedalling of the K-Rail high-speed railway project is seen as evidence of this calibrated, conflict-averse approach.
Some academicians argue that the neoliberal path the Left has embraced is exerting immense pressure on Kerala’s finances. Dr. K. P. Kannan, economist and former director of the Centre for Development Studies, contends that the CPM in Kerala has “gradually come to terms with neoliberalism,” especially over the last decade under what he calls the “absolutist leadership” of Pinarayi Vijayan. He notes that the party has developed a special affinity for the rising Kerala diaspora capital—shaped mainly in the Gulf—but points out that this investment flows overwhelmingly into quick-profit service-sector ventures such as luxury malls, five-star hotels, tourist resorts, and high-cost tertiary care hospitals. According to him, those who describe this political metamorphosis as reinvention are typically public officials or committed party loyalists.
Despite his criticism, Kannan believes Kerala will not “go the Bengal way,” partly because the state is historically accustomed to the cohabitation of religious communities and has a secular-minded, modern young generation.
In Kerala, the Left places great faith in its expansive welfare architecture, which reaches nearly one crore people—roughly 45 per cent of the electorate—and, they believe, provides a dependable cushion against political turbulence. Critics, however, argue that this confidence borders on wilful blindness to the economic and environmental consequences of the neoliberal policies the government is now pursuing.
Even with its policy recalibration, the Kerala Left does not publicly identify itself as a “new” or “reinvented” Left—labels some academics associated with the government readily use. Party leaders insist that their approach to private capital has been consistent since the first communist ministry under E. M. S. Namboodiripad. They point to EMS’s invitation to the Birlas to set up a rayon factory in Kerala as evidence. “The party never had illusions about resisting private capital while operating within a federal structure dominated by the bourgeoisie. But to connect with the aspirations of the youth, redundant slogans must be updated,” a senior leader says, requesting anonymity.
CPIM politburo member Muhammad Salim firmly rejects the notion of a distinct Kerala model or a reinvented Left. “There is no separate approach for Kerala. Our party has well-thought-out policies, and every unit functions accordingly. The relevant units determine the best way to implement these policies. In Bengal, we erred in some areas, and we have reviewed and accepted where we went wrong. That is history now. In Bengal, we are on a revival path; in Kerala, we are consolidating our position,” he tells Outlook.
The denials notwithstanding, the shift in the Kerala Left’s approach is unmistakable. The Bengal debacle may have served as a catalyst, prompting the party to discard some of the “obstinate” policies it clung to for decades. For the pro-growth and pro-capital section within the CPI(M), pragmatism—not rigid ideology—is now seen as the key to political relevance and survival.
